Teaching Kids About Money: How My 4-Year-Old Bought Her Own Bike
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“But I really, really, really want one. My friend Dallin has one.”
Ahh, the persistence of a 4-year-old. Begging for a new bike like a dog at the dinner table.
Her birthday had just passed, so giving it as a birthday gift would mean waiting another year. It snows A LOT where I live during Christmas, so that wasn’t a practical idea either.
I’d love to have her outside riding a bike, the dilemma is giving into her incessant whining and begging and sense of entitlement. NOT something I’m willing to cave to.
It was time to teach the kid a thing or two about money …
Too many kids have this mistaken thinking that money is just there. It’s like air.
“Dad has lots of money.” I’ve heard the little one say. No big deal. Just give them money and give me my bike.
Even worse …
The idea that credit cards are money.
“Just slide your card.”
That’s really all you have to do to get a new bike, right?
Already at such a young age our daughter is formulating a misconception about money. Time to step in and teach what money really is.
(Insert knuckle and neck cracking here.)
Work = Money
It’s a simple formula.
You don’t work, you don’t get money.
You don’t earn money, you don’t get nice things. (Even if you have a credit card.)
Easy work = less money. Hard work = more money.
In our home we don’t believe dragging a duster across the table is worth very much.
Actually, most chores in our home earn $0.
Zero. Zip. Nada.
You live here, you help keep the house in order.
You slept in your bed, I’m certainly not going to pay you to pull the covers up and straighten the pillows.
You ate off the dishes, (from a meal that I cooked and paid for) don’t even think about asking me to pay you to put them in the dishwasher (or sink).
That said, children do need opportunities for work that will earn money in order to learn how to handle money.
Children need opportunities to work in order to learn how to handle money.
How Our 4-Year-Old Earned Money
We pay for things I would willingly hire someone else to do for me if I could.
(Outsourced housework sounds a little bit like heaven to me.)
Here’s a list of chores we paid our daughter to do:
- Pulling weeds and work in the garden – she helped pull weeds and take them to the garbage. We also gave her garden sheers and let her cut down old plants. She loved taking a little watering can around to water plants.
- Pick up garbage outside - We put up Christmas lights on our house and when we take them down the hooks end up all over the place. We paid our daughter $0.01 for each hook she picked up in the yard. If it's safe, you could also have your child walk up and down the road you live on and pick up garbage in the road as service to your neighborhood. Or likewise in a nearby park. (Use gloves!)
- Wash baseboards and doors - Of course I followed behind her to make sure they got clean, but this was actually quite fun for her to do.
- Sort and fold laundry (if she were a little older this would be a non-paid chore, but because for her it was a challenge we paid her for it)
- Help daddy in the garage – my husband cleaned the garage and gave our little girl various assignments to help him. (Don’t worry, she wasn’t handling power tools.) She put things away on shelves and helped sweep the floor.
- Wash and clean out the car – Car washes can be super fun for kids to do. Grab a bucket of soapy water and slap a soaking towel. She also picked up all the garbage in the car and used a hand held vac to clean up crumbs.
Does my list sound a little hefty for a 4-year-old?
We did keep her age in mind and know that she wouldn't do a perfect job. One of us was always there to help.
And she actually LOVED all of the work we were having her do. (She's not quite to the age of "ahh man, do I have to do that?") She's thrilled when she gets to be a "big girl" and help mom and dad.
You may have your own criteria for what you will and will not pay your child to do. Whatever works for your family is great!
Here are a few more suggestions for work.
- Empty Garbage
- Sweep/Mop Floors
- Setting/Clearing Table
- Helping with Meals (washing/peeling veggies, stirring food, making simple, uncooked meals)
- Pet care – walks, clean up, feeding
- Laundry – wash, fold, put away, ironing (as age appropriate)
- Watering Plants
- Mow Lawn
Keep Track of Money
Our 4-year-old did not yet understand the value of money (i.e. a dime vs. a penny or $1 vs. $5). This was a great opportunity to start teaching her that just because dollars look the same doesn't mean they are worth the same. And just because a nickel is larger than a dime doesn't mean it's more money.
We also wanted her to learn that you have to keep it in a safe place so that it'll grow as you add more and more to it.
My favorite features:
The idea with keeping your child's piggy bank or spending envelope transparent is so they can see the money inside and see the amount getting larger and larger.
When all was said and done, our 4-year-old still didn't have quite enough from what we paid her for her bike ... but it didn't matter.
She is at an age where she can't count money so she didn't quite get that she didn't have enough money. What she did learn is it took A LOT of work to earn her bike, and we felt she deserved it.
We let her use the money she earned and pay for her bike. (Dad picked up the rest of the tab and covered the cost of a helmet.)
She has loved riding her bike, but here's my favorite thing I heard her say:
"I can't wait to do more work so I can earn more money."
That was music to my ears! She's still got more to learn about saving and not spending every penny she earns, but I think she's on her way.